Board Diversity – Angiodynamics, Inc. (2014)
Resolved: Shareholders request that the Board of Directors adopt a policy on Board diversity that requires the Nominating and Corporate Governance Committee consistent with its fiduciary duties to:
- include women and minority candidates in the pool from which Board nominees are chosen;
- expand director searches to include nominees from both non-executive corporate positions and non-traditional environments such as government, academia, and non-profit organizations;
- report to shareholders by February, 2015, at reasonable expense and omitting proprietary information, its efforts to encourage diversified representation on the Board and the manner in which it will assess the effectiveness of its efforts and policy.
Angiodynamics has no woman on its board of directors.
Smiths Group Plc, a healthcare sector peer, has two women on its board. C.R.Bard and Teleflex, also peers, each have one woman on their boards.
According to Angiodynamics’ website, the Board of Directors “sets high standards for the Company’s employees, officers and directors. Implicit in this philosophy is the importance of sound corporate governance.”
In an increasingly global marketplace, the ability to draw on a wide range of viewpoints, skills, and experience is critical to a company’s success, as it increases the likelihood of making the appropriate strategic and operational decisions.
We believe diversity, inclusive of race and gender, is therefore an essential measure of sound governance and a critical component of a well-functioning board.
With women representing 73% of medical and health service managers, according to the Bureau of Labor Statistics, board diversity assumes importance in the industry Andiodynamics operates.
We share SEC Commissioner Luis Aguilar’s belief, expressed in September 2010 that “companies that expand their search for new directors to include more women and minorities will find a breadth and depth of talent that will serve to improve their performance and increase the wealth of their investors.”
A growing body of academic research shows that there is a positive relationship between firm value and board gender diversity.
According to an August 2012 report by Credit Suisse Research Institute, which evaluated the performance of 2,360 companies globally over the six years ending December 2011, companies with one or more women on the board delivered higher average returns on equity, better average growth, and higher price/book value multiples.
The proposed policy resembles the Rooney Rule in the National Football League, which requires teams to interview minority candidates for head coaching and senior football operations openings. While corporate boards may face differing circumstances, it is difficult to ignore the positive impact of the Rooney Rule on diversity and performance.
According to Forbes (5/9/12), “In 2002, the year before the Rooney Rule was implemented, three head coaches were minorities. Going into last season, 11 minorities were interim or full-time head coaches and five minorities were general managers.” Moreover, “the last six Super Bowls have featured at least one team with a minority head coach or general manager.”
We urge shareholders to vote for this proposal.